The arrival of technological advancements in the Indian economy has opened doors to many opportunities across various sectors, but it has also presented numerous challenges. Like two sides of the same coin, technology is both a bane and a boon for our country. With the advent of technology, cybercrime and harassment have surged on digital platforms.
Although there are various advantages of technology—such as ease of business, convenience, freelancing opportunities, easy access to loan facilities, and various digital lending platforms—problems arise for common people when they cannot differentiate between scams and genuine platforms..
The Impact of Technology on Loan Borrowers
Every aspect of our lives has been transformed with the introduction of technology, and the financial sector is no exception. Technology has influenced the criteria for granting loans, the functioning of lending platforms, and the methods of debt collection. While digital platforms have increased feasibility and efficiency, they have also become breeding grounds for illegal activities. As a result, we face the conundrum of technology being a double-edged sword. These changes have also paved the way for various forms of harassment towards borrowers.
Evolution of Recovery Agents’ Harassment
To understand how technology can be misused in the banking industry, we must first examine how debt recovery methods have evolved over time. Traditional methods of debt collection include, but are not limited to, mail, phone calls, and face-to-face interactions. However, with the advent of technology, modern methods now include robotic calls, IVR messages, threats to visit the borrower’s place of employment, collecting and misusing private data, circulating false information and even nude photos of borrowers, and humiliating them among their relatives, friends, and family. It also includes overwhelming borrowers with calls from unidentified numbers at odd hours, sending coercive WhatsApp texts with threats such as blocking the borrower’s PAN card or Aadhaar card, filing cases against them for cheating, embezzlement, or check bouncing, and sharing the borrower’s Google Maps location to pressure them into believing that the agents know their whereabouts at all times.
The technological progression in India has enabled these unrestrained recovery agents to act without any checks or punishment for their actions. A finding by the Consumer Financial Protection Bureau (CFPB) revealed that 27% of borrowers were approached by agents on various digital platforms.
Misuse of Private Information
In many cases, agents misuse the private information of borrowers, which they access through various data extraction methods. This not only violates various RBI guidelines but also infringes on the fundamental right to privacy of the borrower. Technology has enabled unforeseen access to private data, which agents can manipulate.
Corruption Feeding on Technological Advancement
This modern-day advancement has made it easier for corrupt recovery agents to imitate government officers, exploiting their IDs to cheat borrowers offline. In United States v. Barr (960 F.3d 906, 7th Cir. 2020), the court upheld the conviction of agents who used various tricks to impersonate government officials and even mimicked their phone numbers. Technology has allowed agents to engage in and employ various deceptive methods to fool borrowers.
Cyber-attacks, such as calls or texts from fake and unidentifiable numbers, WhatsApp calls, untraceable communication, phishing scams, etc., are being used to pressurize borrowers into paying money. There’s no limit to these atrocities, as agents even go so far as to threaten the loved ones of borrowers. The payable amount is often falsely increased with unreasonable interest.
The relentless pursuit of borrowers by agents, aided by technological advancement, has an adverse effect on borrowers’ mental and emotional well-being. Fear-induced anxiety, panic attacks, suicidal thoughts or attempts, depression, and insomnia are common outcomes of such harassment. Along with mental well-being, this also puts borrowers’ financial health at risk, leading to reduced credit scores and the impossibility of obtaining loans in the future. A study in the Journal of Urban Health found that this surge in unfettered and unethical recovery practices, aided by technological means, is causing anxiety and depression in borrowers’ lives.
Conclusion
In the world of technology, it becomes imperative to maintain an equilibrium between the legal rights of creditors and the safety of borrowers. This balance can only be achieved through collective measures by our lawmakers and government.
Contact us today at https://www.lawyerpanel.org/and take the first step towards financial recovery.
